Missouri and Kansas are using eight- and nine-figure economic development subsidy packages to steal jobs from each other. A new study finds no abatement.
Often, the practice is paying to prevent jobs from being pirated and is detailed in a new report from the nonprofit taxpayer watchdog organization “Good Jobs First.”
The Washington, D.C.-based research group said Missouri and Kansas are included in states wasting billions of dollars to shift existing jobs from one state to another rather than creating actual new jobs.
The practice is called “”job poaching.”
It’s not the first time Kansas City area business leaders have spoken on the issue. Now the rhetoric is less varnished.
This time Bill Hall of Hallmark Cards had data collected for a study titled “interstate job fraud.”
Hall said the region has paid more than $200 million in recent years for no new jobs.
Companies shuffle between states taking the best deals, an economic border war that Hall said is escalating.
As an example, Hall said many are small offices moving a few miles into Kansas for relocation incentives--“these people are not leaving the city as some economic development officials would have you believe. These types of companies would not leave and are relocating solely for generous incentive packages that are available.”
The study collected by “Good Jobs First” said the cost of allowing a state to be able to say it got new jobs far outweighs any benefit, and is unfair to stable companies.
The executive director of the watchdog group, Greg LeRoy called the maneuvering “ a shell game.”
He said states actively try to lure existing jobs from other states and re-label them “new,” then shower “footloose companies” with subsidy packages.
The study found a tiny number of companies get large subsidies but net impact of interstate job relocations is microscopic.
Leroy said the practice is unfair to stable companies because new arrivals are excused from paying taxes.
Fifteen years ago Missouri and Kansas signed an anti-job poaching agreement.
The study called it an “utter failure.” It said the Kansas Department of Revenue acknowledged he agreement’s existence but “was unable to produce the document.”